First, the good news: Jack isn't dead. He was just covered in pig's blood. Like Carrie, but without the subsequent telepathic slaughter.
Mam returns and the Spook arrives. He confirms that Mother Malkin is gone for real, because when the pigs ate her, that's just as good as eating her heart.
However, the Spook wants to put Alice in Mother Malkin's vacant pit.
Tom tries to defend her, saying that she saved Ellie's baby and really meant well when she used the mirror.
So they decide to ask Mam about it, and Mam says the choice is up to Tom.
She sits him down with the Latin book. She tells Tom that the priest who wrote it was the Spook, who used to be a priest.
They talk about witches, and how there are different types. Mam suggest that Alice might be benign. "She might end up somewhere in between. […] That girl could be the bane of your life, a blight, a poison on everything you do. Or she might turn out to be the best and strongest friend you'll ever have" (14.69).
So, yeah, tough decision. We don't envy Tom at all.
Tom asks Alice about the baby cakes... were they made with real baby?
She says they weren't, but Tom wants to know where the blood came from. Alice rolls up her sleeves and reveals some pretty gruesome scars.
This proves something of her loyalty to Tom. He decides to let Alice live. He takes her to stay with her aunt in the town of Staumin. That has to be better than being stuck in a hole head first, right?
On the way to her Aunt's house, Alice and Tom get to know each other a bit better. They even say they'll miss each other when they part.